A new office building in Chicago, good news on FHA’s MMI Fund and Nevada teachers fighting against public funding of a baseball stadium. From the wild and wooly world of real estate, here are the hits and misses for the real estate week of Nov. 13-17.
Hit: A New Chicago Skyline Addition. Reports of the office property sector’s fraying health don’t appear to have reached Chicago, as the construction company Skender joined developer Fulton Street Companies and community leaders to celebrate the groundbreaking of 919 W Fulton St., an 11-story mixed-use office development in the city’s Fulton Market neighborhood. The 409,000-square-foot project marks Chicago’s first major new office development to commence construction in over a year, with an opening slated for 2025. Some office and retail tenants are already lined up, and perhaps this can be the spark of a new wave of optimism that will lift the office sector out of its doldrums.
Hit: A Strong Fund. Kudos to the Federal Housing Administration (FHA), which reported earlier this week that its Mutual Mortgage Insurance Fund maintained an overall capital ratio of 10.51% as of the Sept. 30 end of fiscal year 2023. This represents a slight 0.6% year-over-year drop, but that is offset when one realizes the total capital in the MMI Fund increased by $3.6 billion, reaching over $145 billion by the end of the fiscal year, compared to fiscal year 2022. Also FHA’s serious delinquency rate was 3.93% at the end of fiscal year 2023, similar to the rate prior to the start of the pandemic. It is encouraging to realize there is some good news coming out of Washington.
Miss: Giving the A’s an F. For years, there has been a debate on the economic value of using public funds to pay for sports stadiums. After all, the teams are not charity cases, and having taxpayers foot their bills (especially during difficulty economic times) doesn’t seem right to many people, especially when many of these stadiums are only open for half the year. That debate rose again this week when the Major League Baseball owners unanimously approved the relocation of the Oakland Athletics to Las Vegas. Nevada’s state government recently passed a law that would allocate $380 million in public financing to help cover the new stadium’s estimated cost of $1.5 billion. But a group of Nevada teachers calling themselves Schools Over Stadiums wants to stop the A’s from receiving that money, and they filed a lawsuit questioning the constitutionality of that new state law. They’re also trying to get voter input on this issue via a November 2024 election ballot measure. Dawn Etchverry, a music teacher and the Schools Over Stadiums president, declared, “Nevada’s priorities are misguided and public funds should not go to a California billionaire for a stadium.” Hopefully, Nevada lawmakers and voters will learn something from these teachers.
Hit: A Minnesota Triumph. One of the more interesting stories we covered this week was WalletHub’s announcement that Minnesota residents have an average credit score of 725, which is the highest among the states. How did they do it? Maybe it is something in the water, of which there is plenty – after all, the state is informally known as the Land of 10,000 Lakes. Cassandra Happe, WalletHub analyst, observed, “It’s not very surprising that Minnesotans have the highest average credit score at 725, considering the state’s stable economy, good job market, and relatively low household debt.” Well, whatever it is, more power to them – and perhaps they can share some tips with the folks in Mississippi, who placed last in this survey with the lowest average credit score of 672.
Miss: An Out of Control Situation. Over the past month, demonstrations across the U.S. that back the Palestinian cause have resulted in vandalism of property (including the White House grounds), public calls for the extermination of both the State of Israel and the Jewish people, and physical violence with at least one death of a California man who was attacked for holding up an Israeli flag. This week, those shenanigans took a deeper and darker turn when a group calling itself Within Our Lifetime posted a map of New York City on its Instagram page with the heading “KNOW YOUR ENEMY.” The map included the locations of offices of Jewish nonprofits, Israeli government agencies and private sector companies that this group considers too supportive of Israel. Within Our Lifetime said the entities in these locations “had blood on their hands” and urged its Instagram audience to use this information “as a call for every struggle to act in their own interest.” Uh huh. Mercifully, Instagram took down this vile posting shortly after it went up, and hopefully it will not be too late to stop these demonstrations from becoming more violent. But if these Within Our Lifetime characters believe attacking New York City’s commercial real estate and threatening the tenants therein will speed their “river to the sea” goals, then they have achieved a new low in vicious stupidity.
Phil Hall is editor of Weekly Real Estate News. He can be reached at [email protected].